After sitting empty for more than three years, the 464-bed private jail in Hardin has signed a deal with the Bureau of Indian Affairs to once more house inmates from two nearby Indian reservations served by only a single overcrowded jail.
The BIA signed a lease with the Two Rivers Authority, the city’s economic development arm, on Feb. 5, bureau spokeswoman Nedra Darling stated in an email. The federal agency could begin holding inmates at the Two Rivers Detention Facility by May, she said.
“Within the next few weeks, the appropriate divisions within Indian Affairs will be conducting the necessary inspections and certifications needed to begin facility usage,” Darling wrote, adding that inclement weather or delays in repair work or the certification process could extend the current schedule.
Built in 2007, the facility has remained mostly vacant in the years since. It briefly held BIA inmates under a federal contract signed in late 2014, but the contract ended about a year later. The population dropped to zero in January 2016.
Darling declined to release a copy of the lease agreement, citing security concerns. But she said the contract calls for the government initially leasing more than 64,000 square feet of the facility for one year, at a cost of just more than $800,000.
The BIA can extend the lease for up to 15 years, Darling said, before a new contract would have to be negotiated. However, the BIA also has the option to opt out of the agreement at any time during that 15-year span, according to John Matovich, the chairman of the Two Rivers Authority’s advisory board.
The Two Rivers facility was financed through $27 million in bonds, which have been accruing interest since the building was constructed in 2007. The most recent audited financial report for the city of Hardin, for the fiscal year ending June 30, 2017, stated that interest was accruing at an annual rate of $960,000 per year.
The full $27 million was still outstanding at the time. Unpaid interest had accrued to more than $16 million, for a total debt of $43.3 million. While the Two Rivers Authority was created by the city of Hardin for economic development projects, it’s the bondholders that are on the hook for the debt — not the city.
Noting that Two Rivers and BIA have been negotiating since April 2016, Matovich said he was optimistic about the fledgling contract.
“I’m hoping for the best,” Matovich said. “The big thing is, it’s finally going to have another operating organization to put into it, to fill a need that’s been needing to be filled for quite some time.”
The lease agreement calls for three “phases,” which correspond to growing inmate capacity for the BIA.
Speaking Friday and again Monday, Matovich said he had not had time to look over the specific language in the lease agreement and did not have exact numbers for the amount of money the BIA would pay as it increases its jail footprint during the latter two phases in the lease.
Jeffrey McDowell, executive director of the Two Rivers Authority, declined to provide any details about the deal.
“We have signed a lease agreement and we are preparing to turn the facility over. That is all I have to offer,” McDowell said.
Reopening the facility, which previously employed up to 55 people, could also provide some local jobs. Officials initially promised the facility would provide more than 100 jobs.
Staff positions will be advertised on the federal government’s website, Darling said, meaning those hires could be local or from outside the Hardin area.
Matovich described the facility as being split into two sides. The “secure side” where inmates are housed, will be operated entirely by BIA staff. The rest of the facility, which houses offices and a courtroom, will be run by Two Rivers, and will include a staff of two or three non-BIA employees, Matovich said.
Darling said the first phase of the lease would allow the BIA to house up to 100 inmates mainly from the Crow and Northern Cheyenne reservations. “Phase I” would require a staff of 35 to 40 BIA employees, Darling said.
The Crow Reservation doesn't have its own detention facility, so BIA police there typically detain people at the Northern Cheyenne jail in Lame Deer.
A review by the Bureau of Justice Statistics stated that jail has held more than triple the number of people its design allows. Overcrowding has been a constant concern there since the 1990s.
Up to 200 inmates would be housed at Two Rivers during the second phase, then up to 300 inmates during the third phase. Darling did not provide space requirements, staffing numbers or rent payments for the second or third phases. It’s also unclear when each successive phase will begin.
Two Rivers has tried unsuccessfully in the past to open its facility, including efforts to handle overflow from county jails in Montana, many of which are chronically overcrowded.
Hardin officials in 2008 said the facility was built to be a privately run prison on the expectation it would be filled with inmates from all over Montana. But, state corrections officials said no agreement was ever made, and the jail remained empty.
In 2009, the empty jail took a bizarre turn when Michael Hilton, later exposed as a con man with a long rap sheet, agreed to lease the facility and turn it into a prison and military training operation. Hilton, who ran a company he called American Private Police Force, promised to fill the jail with inmates and build a large, paramilitary training center nearby.
With the new lease, the maximum number of BIA inmates would still leave more than 150 beds vacant. It’s unclear whether Two Rivers, under the new lease, would be able to fill those slots with inmates from other jurisdictions.
Asked whether the agreement gives the BIA exclusive rights to house inmates at the facility, Darling responded, “The space leased by the BIA will only be utilized to house inmates identified by BIA. State and local inmates from outside of Indian Country will not be allowed to be housed in the space leased by the BIA.”